TESTBANK for South-Western Federal Taxation 2025: Individual Income Taxes, 48th Edition by James Young Complete Chapters 1 - 20

TEST BANK x




South-Western Federal Taxation 2025:
x x x




Individual Income Taxes, 48th Edition
x x x x




by James Young Complete Chapters 1 - 20
x x xx x x x x




Pagex1

,TABLE OF CONTENTS
x x x




Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
x x x x x x x x x x x x




Chapter 2: Working with the Tax Law
x x x x x x x




Chapter 03: Tax Formula and Tax Determination
x x x x x x x




Chapter 04: Gross Income: Concepts and Inclusions
x x x x x x x




Chapter 05: Gross Income: Exclusions
x x x x x




Chapter 06: Deductions and Losses: In General
x x x x x x x




Chapter 07: Deductions and Losses: Certain Business Expenses
x x x x x x x x




Chapter 08: Depreciation, Cost Recovery, Amortization, and Depletion
x x x x x x x x




Chapter 09: Deductions: Employee and Self-Employed-Related Expense
x x x x x x x




Chapter 10: Deductions and Losses: Certain Itemized Deductions
x x x x x x x x




Chapter 11: Investor Losses
x x x x




Chapter 12: Alternative Minimum Tax
x x x x x




Chapter 13: Tax Credits and Payment Procedures
x x x x x x x




Chapter 14: Property Transactions: Determination of Gain or Loss and
x x x x x x x x x x




Chapter 15: Property Transactions: Nontaxable Exchanges
x x x x x x




Chapter 16: Property Transactions: Capital Gains and Losses
x x x x x x x x




Chapter 17: Property Transactions: 1231 and Recapture Provisions
x x x x x x x x




Chapter 18: Accounting Periods and Methods
x x x x x x




Chapter 19: Deferred Compensation
x x x x




Chapter 20: Corporations and Partnerships
x x x x




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, Chapterx 01x 2025x Individuals

Answersxatxthexendxofxeachxchapter

Indicatex whetherx thex statementx isx truex orx false.
x x 1.xSalesxmadexoverxthexinternetxarexnotxexemptxfromxthexapplicationxofxaxgeneralxsalesx(orxuse)xtax.
a. True
b. False

x x 2.xUponxauditxbyxthexIRS,xFaithxisxassessedxaxdeficiencyxofx$40,000xofxwhichx$25,000xisxattributablextoxnegligence.
Thex20%xnegligencexpenaltyxwillxapplyxtox$25,000.
a. True
b. False

x x 3.xUltimately,xmostxtaxesxarexpaidxbyxindividuals.
a. True
b. False

x x 4.xEvenxifxpropertyxtaxxratesxarexnotxchanged,xthexamountxofx adx valoremxtaxesximposedxonxrealtyxmayxnotxremainxthexsame.
a. True
b. False

x x 5.xThexprincipalxobjectivexofxthexFUTAxtaxxisxtoxprovidexsomexmeasurexofxretirementxsecurity.
a. True
b. False
x

x 6.xIfxmorexIRSxauditsxarexproducingxaxhigherxnumberxofxnoxchangexresults,xthisxindicatesxincreasedxcompliancexonxthexp

artxofxtaxpayers.
a. True
b. False
x

x7.x Axsafexandxeasyxwayx forxaxtaxpayerxtoxavoidxlocalxandxstatexsalesx taxesxisxtoxmakexthexpurchasexinxaxstatex thatxlevie
sxnoxsuchxtaxes.
a. True
b. False
x

x 8.xAxcalendarxyearxtaxpayerxfilesxhisx2023xFederalxincomextaxxreturnxonxMarchx4,x2024.xThexreturnxreflectsxanxoverpaym

entxofx$6,000,xandxthextaxpayerxrequestsxaxrefundxofxthisxamount.xThexrefundxisxpaidxonxMayx16,x2024.xThexrefundxneedxnotxincl
udexinterest.
a. True
b. False

x x 9.x AxtaxxcutxenactedxbyxCongressxthatxcontainsxax sunsetx provisionxwillxmakexthextaxxcutxtemporary.
a. True
b. False



Pagex3

, Name: Class: Date:x

Chapterx 01x 2025x Individuals

x x 10.xForxFederalxincomextaxxpurposes,xtherexneverxhasxbeenxaxgeneralxamnestyxperiod.
a. True
b. False
x

x 11.xToxlessenxorxeliminatexthexeffectxofxmultiplextaxation,xaxtaxpayerxwhoxisxsubjectxtoxbothxforeignxandxU.S.xincomextaxesx

onxthexsamexincomexisxallowedxeitherxaxdeductionxorxaxcreditxforxthexforeignxtaxxpaid.
a. True
b. False
x

x 12.xBecausexitxisxconsistentxwithxthexwherewithalxtoxpayxconcept,xthextaxxlawxrequiresxaxsellerxtoxrecognizexaxgainxinxthexy

earxthexinstallmentxsalexoccurs.
a. True
b. False

x x 13.xThexamountxofxaxtaxpayer’sxitemizedxdeductionsxwillxincreasexthexchancexofxbeingxauditedxbyxthexIRS.
a. True
b. False
x

x 14.xInx2024,xJosé,xaxwidower,xsellsxlandx(fairxmarketxvaluexofx$100,000)xtoxhisxdaughter,xLinda,xforx$50,000.xJoséxhasxnotx

madexaxtaxablexgift.
a. True
b. False
x

15.xForxomissionsxfromxgrossxincomexinxexcessxofx25%xofxthatxreported,xtherexisxnoxstatutexofxlimitationsxonxaddi
x

tionalxincomextaxxassessmentsxbyxthexIRS.
a. True
b. False

x x 16.xStealthxtaxesxhavexthexeffectxofxgeneratingxadditionalxtaxesxfromxallxtaxpayers.
a. True
b. False
x

x 17.xJason’sxbusinessxwarehousexisxdestroyedxbyxfire.xBecausexthexinsurancexproceedsxexceedxthexbasisxofxthexproperty

,xaxgainxresults.xIfxJasonxshortlyxreinvestsxthexproceedsxinxaxnewxwarehouse,xnoxgainxisxrecognizedxduextoxthexapplicationxofxthex
wherewithalxtoxpayxconcept.
a. True
b. False

x x 18.xAnxinheritancextaxxisxaxtaxxonxaxdecedent’sxrightxtoxpassxpropertyxatxdeath.
a. True
b. False

x x 19.xWhenxinterestxisxchargedxonxaxdeficiency,xanyxpartxofxaxmonthxcountsxasxaxfullxmonth.
a. True
b. False
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